Monday, 25 June 2012

Europe is crying out for more integration.

At least that is what María Dolores de Cospedal thinks. She is the secretary-general of Spain’s governing centre-right Popular party. This is what she said.....

“Europe is crying out for greater fiscal, financial and political integration. We know that Europe must be strong so that Spain can be strong.”

If, as she says, that Europe is calling with one voice for the Eurocrats in Brussels to take over the running of the European economy, shouldn't we actually give the European people a moment to express their opinion.

How about a Europe wide referendum on greater integration. Let us see what the people really think,

So a pro-austerity, belt-tightening right wing politician is also a left-wing benefit cheat?

I'm no right-wing austerian but not even the thought of making fun of the Rajoy government lets me accept your description of her motives. After all, more political integration is what the Germans wanted before jumping into the Euro. Eventually they relented but that was their position back then. The elites in Brussels have argued for the same regardless of whether their respective nations pay in or draw out of the system.

It's not entitlement that leads her to say this. A nation with its own currency would be in a better position to fight this crisis. Spain has learned that the ECB won't accept their proposals, which means they are having to get more debt to help useless banks. Given those conditions anybody would be complaining about the Euro's present limbo which dooms governments into a debt spiral.

Droog you are wrong - the clue is in her statement "Europe must be strong so that Spain can be strong". That actually means we must be given money by the rest of Europe or we can't go on living at our present standard. Plain fact is, they have a property bust due to absurd over-investment and speculation. They can't solve this in the present structures. Either they leave the euro or they hand over their economy totally to Brussels. As Alice said, don't you think the Spanish people and those who will have to pay for their debts, might perhaps get to have a vote on it?

@droog: The government of Spain are not right wing. They may be enforcing cuts in public spending, but that does not make them right ring. They are only imposing the cuts because they have to, as they have run out of money, as socialists always do. And now they can no longer find fools to lend them money they want to force the taxpayers of other countries to pay for them. Doesn't sound very right wing to me. Sounds suspiciously socialist to me.

Spain (and all the other basket cases) should do what we have done, let their currency sink (by reintroducing the peseta), print plenty of them, and tell the bankers who they owe billions of euros to to go hang. Initially it would be nasty, as it was in Iceland. But 3 years down the line, or maybe even less, they would reap the rewards. The current policy has no rewards. It is the economic equivalent of George Orwell's boot grinding into the face of humanity for all eternity.

ernie, I don't have a problem with what Alice said regarding the need for a referendum. I'm objecting to the more specific claim that any call for more integration (particularly from a right wing government) is a sign of entitlement. Lots of people have argued for integration and the case is clear now that either the Eurozone dissolves or more integration is needed. The present state is not viable. I'm not agreeing with de Cospedal; merely pointing out her views aren't the result of a lazy borrowing culture.

The ECB shut the door in Spain's nose over the Bankia deal when in fact the ECB have given away tons more money to banks. The sovereign governments can't sit across the table from the ECB and craft a solution as partners. They simply don't have that power any more. So naturally Spain are calling for a change where they don't have to swallow a bunch of debt merely because the ECB doesn't feel like being rushed. The way out of depressions is combining fiscal and monetary policies, and Spain can't get the ECB to cooperate on the latter. Hence de Cospedal's views. You may not agree with them (or the method by which she wants them enforced) but at least she recognises the status quo is sinking them. That counts for at least one working neuron.

Jim, so right wing governments never borrow and grow debt? By your definition even GW Bush was a socialist. "Right wing policies cannot fail, they can only be failed".

DroogWe actually seem to agree more or less! You are quite right that there is only dissolution or full union. Opponents of the euro have had this position from the start and now it is staring the eurozone nations full in the face. Since there won't be a union we should now expect the increasing emergence of national interest and fragmentation of political lines even within member countries as well as between them.

Surely the real benefit of having ones own currency is the opportunity it affords to inflate the debt away. This at once robs creditors and those daft enough to have saved up. That is the elderly and the less feckless in most countries.

What happened to free trade, low inflation and fiscal responsibility? Politicians are like grass. They bend in the wind ( to parphrase Confucious ).

GW Bush was a socialist. He borrowed and spent more money than he raised in taxes by a massive margin. Most politicians in Western democracies are socialists. Its how they get votes, promising people goods, services and cash that they have not earned, that are paid for by taxes taken by force from other people who have earned them, or are taken from future taxpayers via borrowing. There are no right wing governments, that promise to balance the books, and then pay back all the debts already run up by their free spending socialist counterparts. Why would there be, do turkeys vote for Christmas?

Democracy results in more and more people voting themselves money at the expense of someone else until eventually the list of someone elses runs out. Initially its national - taxes are raised and spent. Then its intergenerational - money is borrowed nationally, to be repaid in the future. Then its borrowed from other nations, to be repaid in the future. When you run out of taxpayers, and private lenders, and finally other nations to bail you out, you are close to the end. The last ditch attempt is to print money to keep the show on the road, which is where we are now. The buffers are coming into view, and we are full steam ahead.

GWB is a socialist because he grew the debt. Same for other world leaders. Never mind that inequality is rising and wages for the working low and middle classes are not rising as much as they do for the rich. If the debt is increasing then plebes must be benefiting from it!

On the other hand, every British PM between the end WWII and John Major reduced public debt. But if both Tory and Labour PMs did this they can't be socialists. For only socialists increase debt. Public debt has increased under the PMs since John Major so all four of them are socialists.

Or something like that, I have considerable problems trying to follow this line of thought.